How to Negotiate Your Medical Bills and Debt With Your Hospital

wall street journal

November 9, 2021 – By Melanie Evans & Anna Wilde Matthews

American households commonly struggle with medical bills, federal and consumer surveys show, often leading to lingering debt. Unpaid bills can drag down credit scores and prompt some people to delay care to avoid more debt.

Managing the bills can be daunting. Hospital bills and insurance statements are complicated and sometimes at odds. But you may be able to slash the amount you owe by questioning your bills,
negotiating with hospitals and pressing for financial aid. It won’t be simple, but high hospital costs make it worth a try, patient advocates say. Here are recommendations that should help you comb through and challenge hospital bills.

I have a large medical bill. Can I lower it?

You may not owe the full amount. That means you should start by gathering information before you hand over money. “Don’t pay anything,” says Elisabeth Benjamin, vice president of health initiatives at the Community Service Society of New York. At least not right away.

There are several good reasons to pause before you settle up, say experts in managing medical bills and consumer debt. Hospitals and insurance companies may take time to sort out billing disputes; meanwhile, patients may get billed for unpaid amounts. Medical bills may contain errors. Some hospitals don’t automatically offer discounts, though they are available. Patients must often ask first. If you have insurance, make sure that all bills have been submitted to your insurer, and that the insurer has made its final determination, Ms. Benjamin says. Keep all your bills and match them up to documents from your insurer called “explanations of benefits,” which should say what it paid. If the insurer and the hospital are telling you different things, call both to figure out the discrepancy.

“You’ll be going ping-ponging back and forth,” says Ms. Benjamin. “If you can get them on the phone at the same time, that’s great.” The goal is for the two big companies to work it out without the pain hitting your wallet.

With or without insurance, you should ask for an itemized bill. Medical bills are hard to decipher, but review them nonetheless for mistakes, patient advocates say. One simple method to scrutinize your bill is to recall the date and services of each medical visit. Next, review dates and services listed on bills for any mismatch, says Amy Clark-Downing, an attorney and consumer team manager for Texas Rio Grande Legal Aid.

If you stumble across something you don’t understand, write or call the hospital and ask. “If it seems at all off, go for it,” Ms. Clark-Downing says. “There may be an error somewhere.” Take notes for every call. A phone number often appears on a bill. Ask for billing or financial-assistance representatives. Expect to make more than one call or be transferred, Ms. Clark-Downing says: “It takes patience.”

Even if bills are correct, you may still be eligible for a discount.

How do I get a discount? I can’t afford my medical bill.

If you are left with a big bill—either because you aren’t insured or your insurance didn’t cover something—that isn’t the end of the line. It’s the beginning of the negotiation. Don’t wait to reach out
until the hospital sends bills repeatedly—you want to head off being sent to a collection agency. Go ahead and call the hospital.
Many hospitals offer financial aid or other discounts for low-income people or the uninsured, but patients often must ask for the help. Financial aid can wipe out all or some of patients’ bills, but it
typically requires an application.

Some will allow patients to qualify for charity before receiving care and bills, which can help ease stress ahead of a scheduled service, said Keith Hearle, president of Verité Healthcare Consulting LLC. “That’s just a comfort ahead of time, to have that information.”
Ask for information about the aid programs and any help from hospitals to get through applications, which can be exhaustive.

However, be warned: Hospitals largely get to set their own rules for who qualifies for aid. Some of them set the bar high, though some states have requirements for hospital financial-aid eligibility: If you are rejected, you should appeal.

You can also try to bargain. See how much of a discount you can get if you promise to pay quickly. Sometimes, hospitals are willing to cut a deal just to get some money fast. Or, you can offer a payment plan under which you will pay a little at a time. You should only offer an amount you think you can manage.

Don’t immediately agree to pay the sticker price, also known as “chargemaster rate,” say patient advocates. This is the hospital’s full price; insurers typically get lower rates for the same service. Push for a better rate if you’re billed the chargemaster, said Mary Daniel, chief executive of ClaimMedic, which helps patients negotiate payment with hospitals. Hospitals may also offer the cash price. That may include a discount off the sticker price, but it is still often higher than any prices paid by insurance companies. Ask for the best price offered to an insurer. Or you can ask for rates paid by Medicare, which typically gets some of the lowest prices. You can look them up here for outpatient services.

New price information, made public by hospitals this year under a new federal rule, might make it easier to see what everyone pays and bargain for better rates, says Neil Sealy, executive director of the Arkansas Community Institute, a nonprofit that organizes around access to health care. But poor compliance has made the data hard to find and use. Some hospitals haven’t made prices
public, and others have made it hard to find the information.

Hospitals are required to post all prices in files that can be downloaded, but these files are unwieldy and would require patients to know billing codes or technical details about their treatment to look up prices.

Alternatively, hospitals must also make public prices for services considered “shoppable,” or the type of care that can be scheduled in advance. But the list is limited to about 300 services in most cases. Some hospitals also make it impossible to compare prices, requiring consumers to provide insurance details and limiting disclosure to that insurer.
“Knowing the difference in prices is good, but it has to be put in a form that people easily can get access to and easily understand, which is often not the case,” Mr. Sealy said.

If you aren’t eligible for financial aid, or the hospital is still asking for more than you feel you can pay, you may want to consider working with a professional advocate. Some charge for their services, while others work free of charge. Some states, like Connecticut, have advocates who are part of the state government. Here’s one place to start. Professional, private advocates, who will likely charge a fee, are also available.

My medical bill went to collections. What happens now?

Jenifer Bosco, an attorney at the National Consumer Law Center, says that if your medical debt is in collections, you shouldn’t pay it ahead of other debt, and you shouldn’t use a credit card to pay it.

However, she says, you also shouldn’t ignore the debt collector. You should engage with the collection agency and try to work out a payment plan. Unpaid bills do often get reported to credit bureaus, Ms. Bosco says, though collection agencies’ timing and process on how the debt is reported to the bureaus can vary. You can ask if the collection agency
will hold off on reporting the debt to the credit bureau. The big credit-reporting bureaus have agreed to wait until 180 days after the medical debt becomes delinquent before including it in consumers’ credit reports, allowing time for patients to resolve insurance issues and billing disputes, according to the National Consumer Law Center. States may have their own limits. Check this resource for the rules on medical debt and collections.

Once medical debt is in your credit report, it will drag down credit scores, adding to household expenses by raising interest rates for credit cards, car loans and mortgages. Medical bills account for 44% of all debt sent to collection agencies among 21 million users of Credit Karma Inc., an online personal finance company. The total amount outstanding: $47 billion in April, according to the company, with the smallest less than $268 and the largest greater than $2,000.

Once unpaid bills are reported to the credit bureaus, collectors may still agree to settle debt, or accept less than the total originally owed, but be aware that your settlements also are reported to credit bureaus, said Ryan Moriarty, an assistant manager of credit counseling at the nonprofit American Consumer Credit Counseling.

You can find help managing your debt from consumer credit agencies. Federal and state agencies offer resources for finding and evaluating a credit counselor. Do some homework on selecting a counselor. Ask prospective counselors for information about fees, state licensing approvals and what services they offer.

At the least, make a small payment monthly to show you’re willing to pay off the debt, which could help in your favor if collectors take you to court, Mr. Moriarty said. “It’s the people who don’t do anything that typically get in the most trouble,” he said.

The hospital or collection agency is suing me over my medical debt. What do I do?
You may be eligible for legal assistance, potentially for free. Ms. Bosco, of the National Consumer Law Center, says you want to engage with the debt collector or the legal proceeding it launches. “That’s a consumer’s chance to dispute the debt,” she says, and you don’t want the debt collector to get a default judgment affirming what it claims you owe. A default judgment is similar to forfeiting your case, with the court finding against you because you didn’t appear.

In some states—if it comes down to a judgment against you—-you could face a lien on your house or
garnishment of your wages.